The pronouncement by David Willetts, the Universities Minister, that the UK should have more private universities is very welcome.

He has also confirmed that BPP, the business and law college, has been granted ‘university college’ status, the first such award for 34 years. Of course, BPP is very different from a conventional redbrick university but it shows that new thinking is afoot in higher education.

Currently, the UK’s only private university is at Buckingham, which first admitted a small student body – less than 70 – in 1976. Ironically, given today’s severe financial constrains, it was also set up during a period of real economic stringency – 1976 was the year of Britain’s infamous loan from the IMF.

Moreover, at that time, there was genuine hostility, especially within the higher education system, towards a new private university.
In the subsequent 34 years, the University of Buckingham has prospered, with a student base almost 1,000 strong, recruited mostly from overseas.

The Buckingham experience provides three crucial lessons for any putative investor in a new public university.

First, Buckingham has specialised in offering the cheaper undergraduate courses – law, economics, politics, history, languages etc. Until relatively recently, there were few courses in the more expensive science-based subjects.

Secondly, the attraction of two-year courses is compelling. Most university courses elsewhere are longer, albeit with extended holidays – hence, a major cost for taxpayers.

Thirdly, the availability of substantial rental accommodation is key to boosting financial returns, since it markedly reduces the marginal cost per student. New universities generally need either expensive on-site accommodation or rely on rental properties in nearby suburbs.

Willetts is hoping interested parties will come forward. But will they?